Gold Futures: Further downside not favoured

Open interest in gold futures markets shrank by around 1.1K contracts after seven consecutive daily advances on Tuesday according to preliminary readings from CME Group. In the same line, volume dropped for the second session in a row, this time by around 18.3K contracts.

Gold keeps targeting $1,880

Tuesday’s strong correction in prices of gold was on the back of shrinking open interest and volume, hinting at the idea that a deeper pullback seems unlikely in the very near term at least. That said, the resumption of the upside in the yellow metal is expected to re-target the recent peak around $1,880 per ounce troy.